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When Real GDP Is Less Than Potential GDP, There Is

Question 36

Multiple Choice

When real GDP is less than potential GDP, there is ________ which leads the unemployment rate to ________.


A) an inflationary gap; rise
B) a recessionary gap; decline
C) a recessionary gap; remain at the natural level
D) an inflationary gap; remain at the natural level
E) a recessionary gap; rise

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